Human capital refers to the stock of productive skills and technical knowledge embodied in labor. Many early economic theories refer to it simply as labor, one of three factors of production, and consider it to be a fungible resource -- homogeneous and easily interchangeable. Other conceptions of labor dispense with these assumptions.

Economic growth

Economic growth is the increase in value of the goods and services produced by an economy. It is conventionally measured as the percent rate of increase in real gross domestic product, or GDP. Growth is usually calculated in real terms, i.e. inflation-adjusted terms, in order to net out the effect of inflation on the price of the goods and services produced. In economics, "economic growth" or "economic growth theory" typically refers to growth of potential output, i.e., production at "full employment," which is caused by growth in aggregate demand or observed output.
As economic growth is measured as the annual percent change of gross domestic product (GDP), it has all the advantages and drawbacks of that measure.

Determining appropriate tax rate based on nature of capital gains
Not all capital gains are taxed at the same rate. Four separate tax rates are available for capital gains. The rate applicable to a particular gain depends on both the total income of the taxpayer and the nature of the capital gain.[5]
The 5% Rate for Adjusted Net Capital Gain of Lower-Income Taxpayers:
A taxpayer with an income of $31,850 (currently the margin of the 15% tax bracket) or less (including amount of capital gain) will see his capital gains taxed at a 5% rate.[6]
The 15% Rate for Remaining Adjusted Net Capital Gain:
Once the total income of the taxpayer exceeds $31,850 (the margin of the 15% tax bracket), the portion of capital gains that make up the excess will be taxed at a rate of 15%. Any capital gains below the $31,850 line are still taxed at 5%, and the remainder of the capital gain that is over that line is subject to the 15% rate. [7]
The 25% Rate for Unrecaptured Sec. 1250 Gain:
A flat 25% capital gains rate is imposed on so-called "unrecaptured 1250 gain". This type of gain occurs only where net capital gain partly consists of gain arising from the sale or exchange of depreciable real property used in the taxpayer's business or held for investment.[8]
The 28% Rate for Collectibles and Sec. 1202 Gains:
Any capital gains arising from the sale or exchange of collectibles and/or Sec. 1202 stock will be taxed at a rate of 28%.[9]

Seven Pillars of capital gain treatment

Seven Pillars of capital gain treatment
Seven Pillars of Capital Gain Treatment5 for deciding if properties were held for investment purposes or primarily for sale to customers in the ordinary course of his trade or business and therefore warranted capital gains treatment under I.R.C. §§ 1201, 1202.
the nature and purpose of the acquisition of the property and the duration of the ownership;
the extent and nature of the taxpayer's efforts to sell the property;
the number, extent, continuity and substantiality of the sales;
the extent of subdividing, developing, and advertising to increase sales;
the use of a business office for the sale of the property;
the character and degree of supervision or control exercised by the taxpayer over any representative selling the property; and
the time and effort the taxpayer habitually devoted to the sales.

Economic factors

Economic factors

These include economic policy, disseminated by government agencies and central banks, economic conditions, generally revealed through economic reports, and other economic indicators.

Economic policy comprises government fiscal policy (budget/spending practices) and monetary policy (the means by which a government's central bank influences the supply and "cost" of money, which is reflected by the level of interest rates).

Economic conditions include:

1990: Preferential rates for capital gains were restored when the maximum tax rate on ordinary income grew to 31 percent, because capital gains remained taxed at 28 percent.14
1993: The maximum rate applicable to ordinary income grew to 39.6 percent; but capital gains remained taxed at 28 percent.15
1997: Congress reduced capital gains tax rate to 20 percent and gave taxpayers in the 15 percent bracket a capital gains tax rate of 10 percent.16
2003: The Jobs and Growth Tax Relief Reconciliation Act of 2003 reduced the tax rate for “net capital gain” from 20% to 15% and to 5% for taxpayers in the lower brackets.17
2008: The 5 percent capital gain tax for taxpayers in the lower brackets will be reduced to zero.18
2011: Absent further action by Congress, the capital gains rates will revert to their pre-2003 levels

Preferential History of Capital Gains

Preferential History of Capital Gains
1921: Congress limited the tax rate applicable to capital gains held for more than two years to 12.5 percent. The highest marginal rate for ordinary income was 73 percent.7
1934: Congress changed capital gain from a lower rate to a deduction so that the longer a taxpayer held a capital asset, the less the amount of gain was subject to taxation.8
1938: Congress reverted to taxing the entire gain at a preferential rate so while the maximum marginal tax rate on income was 81.1 percent, capital gains were only taxed at 15 percent.9
1942: The highest marginal rate for ordinary income grew to 91 percent and the rate for capital gains grew to 25 percent.10
1969: Congress returned to a deduction scheme, permitting taxpayers to exclude 1/2 their net capital gains. Taxpayers in the 70% bracket could limit their capital gains tax to 35%.11
1978: Congress increased the deduction from 50 to 60 percent, allowing taxpayers in the highest tax bracket to incur a tax of 28 percent on their capital gains.12
1986: The Tax Reform Act of 1986 repealed all preferences for capital gains. The maximum tax rate applicable to ordinary income and capital gains was set at 28 percent.13